The demise of the Flip video camera reads like the opening of a great murder mystery—or at least a decent Law and Order episode. Someone (or in this case, something) has been killed, there are a few suspects, but very few clues.
Or, more accurately, we know who done it: Cisco Systems Inc., the Silicon Valley networking gear giant that set its sights on the consumer video market and forked over $590 million to acquire Pure Digital Inc., the inventor of the Flip, in 2009. What we don't have, and what very few people appear to have even sound theories on, is motive.
Clearly, Cisco wanted out of a consumer business that it never really understood and that offered pitiful margins compared with Cisco's big ticket networking gear. (As evidence, several analysts cite the flop of Cisco's Umi video conferencing devices, which carried a price tag—$600 plus $25 per month for service—that many felt was untenable.) But the company's decision to pull the plug on the Flip business—rather than sell it off—has many people scratching their heads.
The Flip, which first hit the market under that name in 2007, is currently the No. 1 selling camcorder on Amazon.com—the black Flip UltraHD, that is. A total of four Flip models are among the top 10 selling camcorders on Amazon. According to the New York Times, a total of 7 million Flip camcorders have been sold to date and Cisco itself claimed that Flip represented 35 percent of the camcorder market.
"At the end of the day, they were selling quite a few of these things," said Michael Gartenberg, an analyst at market research firm Gartner Inc.
But despite this impressive positioning, it's pretty clear that nobody would have paid Cisco anywhere near $590 million to acquire the Flip business—and here is where our chief suspect, smartphone convergence, comes in. The market for camcorders, especially small, mobile camcorders like the Flip, is on the wane. In fact, according to market research firm IHS iSuppli, overall camcorder shipments have been relatively stagnant since at least 2003—the firm projects that in 2012 about 17.2 million camcorders will ship worldwide, compared to about 17.3 million in 2003.
Analysts have long warned that gadgets that specialize in one thing would be threatened by the convergence of devices that can do several things. Smartphones are the biggest thug, growing enormously in popularity and—in a competition for marketshare among each other—rapidly adding new functionality. The fact of the matter is that nearly everyone who packs a smartphone today—and even more so a year or two from now—is already lugging around a pocket-sized device that shoots video of comparable or better quality than the Flip.
Even so, someone would have paid something for the Flip business, which would have included a market-leading product, a lauded brand and a creative team of designers who shocked the world once and, who knows, could do it again.
Flip video can turn into an app that goes into a smartphone. The convergence that is brought with smartphone has killed some products and will continue to do so.
For PND, personally, I still prefer to have a separate PND device from my smartphone for an obvious reason. I don't really enjoy my navigation being interrupted by an incoming call. In addition, with navigation on during my tour, the battery in the smartphone just can't last. What's your preference?
I've always been a big fan of GPS nav. However, as with the other convergence devices, I simply don't want to have to carry more stuff. When I'm driving, I usually have my phone CLA powered, using it as a media source (BT) for music, and handsfree - so power isn't so much an issue and it's already set up anyway. And if I know I'm going to have some heavy use without access to power, I have an expanded capacity battery. For other nav purposes, such as walking or basic "where is that restaurant" nav, a smartphone works fine (and how often do you just carry around a PND?). So a smartphone handles 90% of my nav needs for "free" and without additional equipment. What other uses do I have for a PND? Well, biking, but then I have a specifically engineered cyclometer/GPS for that. So really, I have no need nor desire for a separate PND. And consider this - one outing on vacation, 3 of us in a rental car, one had a PND, one had an iPhone, and I had my EVO. Who was doing the nav? Me.
I'm glad the article pointed out one of the often overlooked barriers to smartphones obsoleting the functionality of all these single-function products: the fact that smartphones have a significant perpetual monthly cost.
Even if I thought a smartphone was an acceptable substitute for my digital still camera or my MP3 player -- and I do not -- I am one of those consumers who likes to buy a product rather than rent it, and use it until a better one comes along, or until it breaks. Then I buy, not rent, a newer model.
Nobody really ever owns their smartphone. You get one from your wireless carrier at a heavily subsidized low price, and you commit to paying a hefty monthly bill for 2 years, part of which is $30/month for internet access. If you change your mind or wish to change carriers, you will end up paying full retail for that smartphone...which may not even work on another carrier's network.
Consider just the monthly data cost of $30, just a fraction of your total wireless bill. At $30/month, how many months would it take to save enough to buy a nice HD video camera? A digital still camera that also does HD video? An MP3 player with 120GB of storage? A portable GPS device?
Perhaps it is inevitable that we will all eventually be pushed into getting smartphones and paying higher monthly bills to one wireless carrier or another. But that doesn't mean that all of us will cherish the idea of become renters rather than owners...
To Frank Eory: You wrote "Nobody really ever owns their smartphone."
You're using the wrong carrier. In the US, the carriers using GSM technology will sell you by-the-month service with no phone and no contract. I've done this for a dozen years. If I feel like having a new phone I just get an "unlocked" phone and transfer my "SIM" (smart card) to it.
Valid point. I see that one can buy a 16GB iPhone4 without a contract for just upwards of $600.
T-Mobile offers unlimited talk & text plus 2GB of data for $70/month with no contract. Or if you don't plan to use much data, you can get unlimited talk, text and 100MB for $50/month, also with no contract, and get a web "day pass" for $1.49 for 24 hours when you need more data.
I acknowledge that the iPhone4 is still useful in those months when you choose not to pay for wireless service. It can still take pictures and videos and still play music.
But it would probably feel rather strange, I think, to take it out and use it as a camera & MP3 player during those months when you choose not to pay for service and it is unable to function as a phone or web browsing appliance.
With my digital still camera or my MP3 player, it never feels strange to not make a monthly payment to enable full usage of the device :)
Sorry, but I've yet to find a decent SmartPhone that takes as good of a video as the FlipHD. When you factor in the ease of use and editing functions, the FlipHD (and likely others in this segment like Kodak's unit) still beat the SmartPhone. From a consumer prospective at least, Ciso made a mistake with this one.
Just used my Flip over the weekend with a tripod. Can't imagine trying to hold a smartphone over more than a minute or two w/o the image starting to bounce all over the place when my arms get tired. Little things like that will ultimately keep many of these single use devices around, though probably not nearly as large a market, as many folks who don't care for quality photo/video (etc) will use their smartphones instead.
Here are the "devices" I have at my disposal on my smart phone: phone, internet access, PDA, camera, GPS nav, video cam, music/video player, scientific calculator. That's seven devices I would have to carry around (not counting "internet access" and the other apps and utilities I have). I am going to have the first two items (phone, internet) regardless. So for me the argument "but the monthly fees" in favor of dedicated devices doesn't really hold water as I will be paying those fees _anyway_, that doesn't really count as a "cost" of that convergence. I see it as I'm going to have that cost anyway so why wouldn't I want those devices integrated into one device I can put in my pocket rather than needing a "man-purse" to carry all those dedicated devices?
And as for the Flip, when you get right down to it, isn't that just an app that could run on a smartphone? It's not like the Flip has any hardware that isn't found on most smartphones.
Like gamers, those who use a camera will not sacrifice function of the lens and aperture combination of the "real thing" for the rubbish you currently get on a Smart Phone and I doubt Smart Phone users will sacrifice the size for a better zoom lens. Even low cost compact ditigal cameras offer such better quality still and video imagery than the best of todays Smart Phones (and at a fraction of the cost).
Why hasn't the Smart Phone killed the calculator? I think there are still some applications that people will want a seperate device for. I still prefer to use the old Casio even when at my PC.
I'm not personaly into video, but can see that it's proponents would still want something like a Flip rather than the shoddy compromise current Smart Phones offer and ease of use; on my last Smart Phone I could never locate the video function in a timely manner so ended up never using it and just gave up and used my still camera in video mode.
I also expect the Tablet will be a passing fad, I've never been attracted to them and all those I know who have them use it for is browsing and it's a very expensive way to surf on a very small screen. Something else I can do on my Smart Phone.
@martin_#5- great point about the calculator. I think we can all basically agree that convergence isn't going to "kill" any of these products. But it, combined with other factors, are going to make the markets for these products smaller, less lucrative and less sexy over time. But that probably would have happened anyway, one way or the other, right?
David Pouge in the NYT probably said it best why the Flip was superior to any smart phone: "The Flip was a great product. Much simpler than a camcorder — the thing pretty much had only one button, Record/Stop — and also much simpler than an app phone....Because it was so quick and simple, you’d wind up catching moments you’d have lost with any other gadget."
As long as you had the Flip in your pocket you could be shooting with seconds.
Equating (stills camera) mega-pixels with "quality" is pure bunk! Stills are either viewed on screen or are printed on a 4" x 6" photographic paper. The first has about 1.1 mega-pixel at best. The second, at 200 pixels/inch, again, at best, accounts for 0.96 mega-pixels.
So pray tell me someone, what do you do with 16 Mega-pixels other than wasting storage volume???
There is a valid point hiding in your post, but obscured by overstating it. Sometimes you want to print an 8"x10" and frame it. Sometimes you just want to zoom in on an image and see more detail. 1MP won't be good for either of those. But 6MP probably would be. 12MP certainly would be. And: what you do with extra pixels on a 4x6 print is average them together to reduce visible noise. It's much easier to reduce noise on a 12MP image without losing significant detail than on a much lower resolution image, where the noise features are about the same size as the details of the image.
OK, but one must keep in mind that more pixels come at a price: smaller pixels. This in turn means less charge to be accumulated, therefore lower signal to thermal noise ratio and very much smaller dynamic range. In other words, poorer images. Also, larger prints are viewed from a longer distance, so resolution matters less. The only place where higher resolution is really necessary and where the above price is (somewhat) tolerable is in reconnaissance. There one looks at every pixel. Hardly the situation in a phone camera.
Reading all the stories about the end of Flip you'd think that this was the only device of it's type and consumers had no other options but nothing could be farther from the truth! I owned a creative Mino HD and loved it until I lost it (glad it wasn't my $500 Droid). Pocket camcorders have their place and will continue to sell but as the quality of smartphone (Uber-Super-smartphones?) comes up, they'll have to compete on more than just decent quality for the price. They'll need to have better optics, better quality, 3-D, etc... at the same or a lower price.
Well I'm sure the writer had a good time itemizing what the smart-phone would kill, but this is kind of a silly article.
Looking at your pics, it seems many of you are as old as I am and so remember all the hype about convergence and the "multimedia PC" from the 1980s. It took till between 2000 and 2005 for the PC to be graceful at doing all the things it did in a clunky manner in the 80s. This iPad mania is just a repeat of the multimedia PC discussion.
Regarding cameras ... you need a big lens to collect a lot of light in many applications until you can deal with the noise problem on CCDs. Once you are carrying a nice hunk of glass and maybe a telephoto lens around, it is no longer a compact device like a smart phone. I suppose you could build a lens mount into a smartphone ... but how about you just stick with a camera? Regarding the MP3 player, as some mentioned, it's not a good idea to carry a $600 smartphone to the gym or on a hike when you can carry a smaller and perhaps more rugged $40 MP3 player.
I guess I buy that the smart-phone will put price pressure on the single purpose devices, but a device that does one thing well often wins against a multifunction device with compromises or complexity.
If we accept that there might soon come a single chip (like Apple's A5 ASIC) which embodies processing, telephony, GPS, photography, networking, video and music player capability (for example), it is possible that the volume on that ASIC could be so high that a music player vendor, a camera vendor, and a portable GPS maker could all buy the same chip and throw away most of its functionality (as I understand Apple did with it's iPod touch, really an iPhone), and only attach the bits that are needed for their single application.
So at the ASIC or firmware level I believe in convergence, but the idea that we need to carry the electronic equivalent of a 20-blade swiss-army knife for simpler modern pleasures is distasteful ... and unrealistic.
Me too ... when my watch is between batteries ... but then you have to remember to put the cel on vibrate in meetings.
Also, the "access time" of a cel phone is longer, you have to take it out of your pocket rather than just looking at your wrist. So again, the simple, single-function device is superior to the expensive multifunction device for the particular job it does!
Apparently none of the items you mentioned have been enough to convince teens to wear watches. They've pretty much switched to cell phones. Oh, and they don't like to answer their phones either. Texting has pretty much replaced talking.
Interesting article. It is ever thus in this industry. We saw this decades ago with multifunction devices combining printing, copying, faxing, and scanning. Smartphones eat at the margins in real ways as will tablets as they catch hold in both the business and consumer spaces.
Notebook and Desktop manufacturers should be heeding the warning signals playing out in the smartphone convergence use case. It's coming to their space as well.
Any true professional would balk at using a smatphone for all their needs.
A professional photographer would use a very high end digital camera or still use emulsion when blowing up pictures to larger sizes. Recording video on a smartphone is akin to those grainy & shaky videos on youtube. If you want real quality, you'd use a dedicated video device.
Wired magazine had an article on "good enough" technology about a year ago. It detailed nicely how we've given up quality for the sake of convenience. Smartphones fall perfectly into that category. They do many things that are good enough to be acceptable to many users but they do not excel at any single task. I've never owned a Flip, but it appears it was a single task device that was on the top of its market.
There are plenty of parallels to use as a comparison and predictor of the future of the stand-alone video recorder / camera / other device vs. the all-in-one smart phone.
In the music and video playback market, you can buy components or self-contained systems. In the computer world, you can buy individual components or all-in-one units. Yes, it is jack of all trades and master of none. That's not good enough for a lot of people, but it is good enough for quite a few people.
If you need pro-quality of any of the specific capabilities, you will likely buy a stand-alone version of that. If the quality offered in a smart-phone is good enough for you, then you'll likely go for the convenience of the smart phone.
In terms of quality, a lot of people talk about the limited quality of many of the camera phones. Again, take a step back a few years. There were high-quality 35mm and larger format cameras. There were also plenty of point-and-shoot moderate quality 35mm cameras, 110, 126 and Polaroid cameras sold. Compare the quality of the latter four and you'll probably come out at about a 1 Mpixel or lower digital equivalent.
Flip was also facing competition from still cameras. More and more of them have a setting for video. Maybe Cisco didn't want to get sucked into a cutthroat digital camera market and found the tax writeoff more palatable. If the death of Flip opens a niche, surely someone will step in to fill it.
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